Am I the only one worried about the increased moral hazard the new plan by Sec. Paulson would potentlially create? The plan basically gives the Fed "official" powers (that were previously under the executive branch) to regulate and act as overseer of investment / financial institutions. Does this mean we can expect more Bera-Stearns-like bailouts in the future? What does that mean to the credibility of the Fed when they are allowed to help certain wall street financial firms under the guise of "maintaining stability?"
Should the Fed have the power to pick and choose who lives and who dies in our economy? I for one can't forsee if the Paulson plan, if enacted, would be a net positive or negative - but it does cause me some alarm to see the largest supposedly non-political institution of our government (the Fed) now being offered new discrectionary powers that could easily be corruptable.
Monday, March 31, 2008
Wednesday, March 19, 2008
So stupid it's laughable.
I just commented on Obama and his brave, honest and intelligent speech on race relations.
Now let's talk about George Bush (ie. Commander in Stupidity).
http://news.bbc.co.uk/2/hi/americas/7305023.stm
Bush gave his own speech today, to mark the 5th anniversary of an unecessary, money wasting, life destroying war. He called it a "strategic victory in the war against terror."
Couple things:
First, it is not, has not, and probably never will be a strategic "victory." He can fly all the "mission accomplished" banners he wants, but thousands of Iraqi's continue to die in the violence, and our soldiers are still getting killed for NO policial progress at all. Second, Iraq has nothing to do with the so-called "war" on terror. Al Quaida did not exist in Iraq prior to our invasion - Bush CREATED the link between Iraq and Al Quaida.
Second, to throw a little economics in the mix here, he said, "The costs are necessary when we consider the cost of a strategic victory for our enemies in Iraq."
No, the sentence should be, economically speaking, "The costs MAY be necessary when we consider the PROBABILISTIC cost of a strategic victory for our enemies in Iraq."
In other words, it's not so black and white as what Bush makes it out to be. Yes, much of our costs are sunk in Iraq - they have taken place and we can't reclaim them. But if Stiglitz et. al. are correct, we could only just be at the base of what will be an astounding cost (in terms of money - not to mention lives). Obviously the Iraqi government doesn't feel enough pressure yet - we need to light a fire and give a timetable for complete withrawl. Otherwise, we are just burning money and killing our own citizens and the citizens of Iraq.
Now let's talk about George Bush (ie. Commander in Stupidity).
http://news.bbc.co.uk/2/hi/americas/7305023.stm
Bush gave his own speech today, to mark the 5th anniversary of an unecessary, money wasting, life destroying war. He called it a "strategic victory in the war against terror."
Couple things:
First, it is not, has not, and probably never will be a strategic "victory." He can fly all the "mission accomplished" banners he wants, but thousands of Iraqi's continue to die in the violence, and our soldiers are still getting killed for NO policial progress at all. Second, Iraq has nothing to do with the so-called "war" on terror. Al Quaida did not exist in Iraq prior to our invasion - Bush CREATED the link between Iraq and Al Quaida.
Second, to throw a little economics in the mix here, he said, "The costs are necessary when we consider the cost of a strategic victory for our enemies in Iraq."
No, the sentence should be, economically speaking, "The costs MAY be necessary when we consider the PROBABILISTIC cost of a strategic victory for our enemies in Iraq."
In other words, it's not so black and white as what Bush makes it out to be. Yes, much of our costs are sunk in Iraq - they have taken place and we can't reclaim them. But if Stiglitz et. al. are correct, we could only just be at the base of what will be an astounding cost (in terms of money - not to mention lives). Obviously the Iraqi government doesn't feel enough pressure yet - we need to light a fire and give a timetable for complete withrawl. Otherwise, we are just burning money and killing our own citizens and the citizens of Iraq.
Obama and Race
Blah Blah more rate cuts, more evidence that the economy is going to be in the crapper for a while....not news.... I'm over it.
So taking a break from economics to talk about a more universal question - one of race and specifically Obama's recent speech. I don't know how this will all play out any more than the next person, but I hear a lot of negative talk about Obama, saying that Obama only now tries to dissavow his former pastor's remarks because it has been brought to light. Comments like this, I'm finding prevelant on the internet:
"Obama has chosen to belong to this racist church for 20 years, and now because of exposure by the press, he tries to fool the American public once again. "
The perhaps mistaken assumption made by people that make such comments is that Rev. Wright spent every minute of his sermons with Obama in attendence over 20 years preaching anti-American and racist rhetoric. I doubt this to be the case. I've attended some rather spirited church functions and I can see how a pastor can get caught up in the moment, and given his crowd, say something that when taken out of context is especially racist and derogatory - and just plain wrong.
Given that that can occur, why should Obama have denounced his preacher? I can understand if it were a regular occurence, but it sounds like it wasn't. It sounds like Rev. Wright has been there for the Obama family - and it sounds like Obama's relationship to him is really none of the American people's business, unless you actually believe Obama is anti-American, or racist, or somehow biased toward blacks - which I think you'd have to be an idiot to think. Americans of course love their drama and their ring-side television - frankly it's getting a little tired and disgusting. I can't decide if I should blame reality tv, Brittney Spears, or just the way the American culture seems to be progressing. But whatever the reason, it is ridiculous and it is not helping anything.
The speech Obama gave was pivotal - politically risky - but he did it anyway. Obama is willing to talk about taboo subjects like few politicians (certainly not Clinton or McCain) are. Race is still a major problem that goes unsaid. Voluntary segregation is visually rampant in this country. As I was growing up in school there were the white's that sat with each other, and the blacks that sat on the other end of the cafeteria. Very little mixing happend. It wasn't organizational segregation, but there existed this unspoken social norm of separation - like "we can't be seen together." It is an epidemic in our society that creates huge social costs - not the least of which is a sense of"Mine will take care of me, yours takes care of you." The United States is not fully united. As Obama expressed, it is a great country that will never be perfect, but it can be further perfected - and for my money, he is the best hope to achieve this for the next 4 years.
So taking a break from economics to talk about a more universal question - one of race and specifically Obama's recent speech. I don't know how this will all play out any more than the next person, but I hear a lot of negative talk about Obama, saying that Obama only now tries to dissavow his former pastor's remarks because it has been brought to light. Comments like this, I'm finding prevelant on the internet:
"Obama has chosen to belong to this racist church for 20 years, and now because of exposure by the press, he tries to fool the American public once again. "
The perhaps mistaken assumption made by people that make such comments is that Rev. Wright spent every minute of his sermons with Obama in attendence over 20 years preaching anti-American and racist rhetoric. I doubt this to be the case. I've attended some rather spirited church functions and I can see how a pastor can get caught up in the moment, and given his crowd, say something that when taken out of context is especially racist and derogatory - and just plain wrong.
Given that that can occur, why should Obama have denounced his preacher? I can understand if it were a regular occurence, but it sounds like it wasn't. It sounds like Rev. Wright has been there for the Obama family - and it sounds like Obama's relationship to him is really none of the American people's business, unless you actually believe Obama is anti-American, or racist, or somehow biased toward blacks - which I think you'd have to be an idiot to think. Americans of course love their drama and their ring-side television - frankly it's getting a little tired and disgusting. I can't decide if I should blame reality tv, Brittney Spears, or just the way the American culture seems to be progressing. But whatever the reason, it is ridiculous and it is not helping anything.
The speech Obama gave was pivotal - politically risky - but he did it anyway. Obama is willing to talk about taboo subjects like few politicians (certainly not Clinton or McCain) are. Race is still a major problem that goes unsaid. Voluntary segregation is visually rampant in this country. As I was growing up in school there were the white's that sat with each other, and the blacks that sat on the other end of the cafeteria. Very little mixing happend. It wasn't organizational segregation, but there existed this unspoken social norm of separation - like "we can't be seen together." It is an epidemic in our society that creates huge social costs - not the least of which is a sense of"Mine will take care of me, yours takes care of you." The United States is not fully united. As Obama expressed, it is a great country that will never be perfect, but it can be further perfected - and for my money, he is the best hope to achieve this for the next 4 years.
Thursday, March 13, 2008
Obama doing townhall in Plainfield, IN?
The Indianapolis Star has a link on its website stating Obama is going to be in Plainfield doing a town hall style meeting this Saturday....It's nice to see my little home state getting some love from potential future leaders. Hopefully he comes downtown too, cause I'm too lazy to drive to Plainfield ;) and risk not being to get into the little high school gym to see him.
Thursday, February 28, 2008
More on Bush Ignorance
I hadn't actually seen the full video clip of Bush responding to the $4 gas question. Now I have. Is there any doubt that Bush is an idiot anymore? I think not. 40% of the US must just be idiots.
That's right. I said it. But i mean COME ON PEOPLE. LISTEN to the man speak! Is our children learning? I think not.
That's right. I said it. But i mean COME ON PEOPLE. LISTEN to the man speak! Is our children learning? I think not.
On Ignorance (Re: George W. Bush)
George W. Bush was asked today about some investors and industry officials commenting that, given current oil prices and potential projections, that we could be seeing retail gas over $4 this coming summer.
Bush's response: "That's interesting. I hadn't heard that."
I wonder if the reason he "didn't hear" it is because he wastes so much (government paid for) gas covorting around Air Force 1 as a political lame duck, or going to his resort away from the White House in Texas. So what does he care about gas prices.
Bush's response: "That's interesting. I hadn't heard that."
I wonder if the reason he "didn't hear" it is because he wastes so much (government paid for) gas covorting around Air Force 1 as a political lame duck, or going to his resort away from the White House in Texas. So what does he care about gas prices.
Wednesday, February 27, 2008
Economic Cost of Iraq
My mind is thinking of Iraq this week for some reason (probably cause of sick of thinking about recession and stagflation and the Fed).
Here is a poignant article (adapted from his recent book) on the real costs of Iraq from economist Lawrence Lindsey.
Some key quotes:
"The bill for Iraq over the past five years is now approaching a cumulative $500 billion, or about $100 billion per year on average. My hypothetical estimate got the annual cost about right, but I misjudged an important factor: how long we would be involved."
Seems like the whole Bush administration misjudged that. "Mission Accomplished" Oh wait, no....
"Oscar Wilde's maxim about people who "know the price of everything and the value of nothing" is sometimes applied to economists. When it comes to the Iraq war, the point has validity."
I keep that quote at hand every day.
"Treasury Secretary Paul O'Neill declared it was "not possible" to estimate the cost of a prospective war when the President had not yet decided to go through with it. He hadn't, but does that mean I should have waited for his decision, then made a calculation on the consequences? Suppose my analysis had come up with a different conclusion, so that after the President had made his decision I would have to tell him, "By the way, Mr. President, the decision you just made may be economically ruinous."
...And O'Neil is the guy that said Bush had Iraq planned out even before 9/11 so you would figure he'd be the last guy to act as a Bush hack.
" Five years after the fact, I believe that one of the reasons the administration's efforts are so unpopular is that they chose not to engage in an open public discussion of what the consequences of the war might be, including its economic cost. "
...Couldn't agree more.
"If the Bush administration was less than candid about the cost of the war, the war's current critics are conveniently forgetting that there were costs involved in not going to war."
...I'd agree with that...but the debate is the degree of risk/costs.
"If our military leaders think we can ultimately prevail, we should stay. If we ultimately cannot, we should leave. It's as simple as that."
...That's a bit simplistic. We've been listening to our military leaders for 8 years (or at least Bush has, along with his listening to God) and that hasn't done us much service. This is not such a black and white call - and it's going to take listening to military leaders, the American people, our allies, our enemies, our soldiers.....all of them.
"Lincoln certainly never took a pencil to do a cost-benefit test. Nor did John F. Kennedy when he said, "We will pay any price, bear any burden ... to assure the survival and the success of liberty." Had any of these leaders done that, they would have fallen into the trap that the economics profession is so often accused of: They would know the price of everything and the value of nothing."
That is true. But WWI, WWII, the Civil War were all about something - with clearly defined objectives, a defined enemy, and a defined purpose. Iraq is a morass of confusion, with many half-invisible enemies. We are there with no purpose other than "we broke it and we must fix it???" There is a big difference between Abraham Lincoln's cause and George Bush's. So, even ignoring price, the value isn't even in the same ballpark.
Here is a poignant article (adapted from his recent book) on the real costs of Iraq from economist Lawrence Lindsey.
Some key quotes:
"The bill for Iraq over the past five years is now approaching a cumulative $500 billion, or about $100 billion per year on average. My hypothetical estimate got the annual cost about right, but I misjudged an important factor: how long we would be involved."
Seems like the whole Bush administration misjudged that. "Mission Accomplished" Oh wait, no....
"Oscar Wilde's maxim about people who "know the price of everything and the value of nothing" is sometimes applied to economists. When it comes to the Iraq war, the point has validity."
I keep that quote at hand every day.
"Treasury Secretary Paul O'Neill declared it was "not possible" to estimate the cost of a prospective war when the President had not yet decided to go through with it. He hadn't, but does that mean I should have waited for his decision, then made a calculation on the consequences? Suppose my analysis had come up with a different conclusion, so that after the President had made his decision I would have to tell him, "By the way, Mr. President, the decision you just made may be economically ruinous."
...And O'Neil is the guy that said Bush had Iraq planned out even before 9/11 so you would figure he'd be the last guy to act as a Bush hack.
" Five years after the fact, I believe that one of the reasons the administration's efforts are so unpopular is that they chose not to engage in an open public discussion of what the consequences of the war might be, including its economic cost. "
...Couldn't agree more.
"If the Bush administration was less than candid about the cost of the war, the war's current critics are conveniently forgetting that there were costs involved in not going to war."
...I'd agree with that...but the debate is the degree of risk/costs.
"If our military leaders think we can ultimately prevail, we should stay. If we ultimately cannot, we should leave. It's as simple as that."
...That's a bit simplistic. We've been listening to our military leaders for 8 years (or at least Bush has, along with his listening to God) and that hasn't done us much service. This is not such a black and white call - and it's going to take listening to military leaders, the American people, our allies, our enemies, our soldiers.....all of them.
"Lincoln certainly never took a pencil to do a cost-benefit test. Nor did John F. Kennedy when he said, "We will pay any price, bear any burden ... to assure the survival and the success of liberty." Had any of these leaders done that, they would have fallen into the trap that the economics profession is so often accused of: They would know the price of everything and the value of nothing."
That is true. But WWI, WWII, the Civil War were all about something - with clearly defined objectives, a defined enemy, and a defined purpose. Iraq is a morass of confusion, with many half-invisible enemies. We are there with no purpose other than "we broke it and we must fix it???" There is a big difference between Abraham Lincoln's cause and George Bush's. So, even ignoring price, the value isn't even in the same ballpark.
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